Rachael McKelvey

• What’s going on at Metro Bank?
• Thousands of drivers get away with speeding everyday
• Is the UK economy okay hun?
• FTX, the greatest work of fiction of our time?
• Corporate Math: A record fine for KPMG

Whats going on at Metro Bank?
This week has seen Metro Bank secure its future through an agreeing a deal with its investors to raise cash to shore up its balance sheet, which isn’t exactly what you want to hear as an investor and certainly not customers who in a panic have started to withdraw their funds over the concerns of the banks overall financial health.

The agreement raised £325 MILLION in new funding and restructuring £600 MILLION of debt in return for slashing operating costs from 2025 to the tune of £30 MILLION a year, currently it is not thought that the 4,000 employees across 76 branches are not at risk but they do account for 45% of the banks total cost, so who knows.

Metros chief exec Dan Frumkin (solid name), who in fairness is stumping up some cash to support the rescue deal has told analysts “There is nothing wrong with the Metro business model, this bank is profitable, will be profitable and its profitability will grow,”. Watch this space. The banking sector so far is doing what it should, but this does have certain twinges of times gone by about it.

Thousands of drivers get away with speeding everyday
It’s not that I’ve never been speeding, I have legitimately just never been caught and apparently research from Road Angel, the road safety experts, might explain why! They published research this week that says 46% of speed cameras in England and Wales simply don’t work.

Of the police forces asked to provide data only 15% confirmed that all their cameras were working and while 15% might sound impressive, that’s the beauty of percentages, in reality that 15% is just two forces, Dyfed-Powys in Wales and Suffolk (unlucky guys!).

But I am not sure this is the shocking news everyone really thinks its is, I am sure every year this story rolls out, with Councils quite proudly claiming they were turning them off and taking them out of action as a cost saving method after the financial crisis and the change in Government funding simply meant they couldn’t afford to service them.

The news here should be that apparently the latest road death figures show that the number of fatalities from speeding is up 20% from 249 to 303 last year and this just feels a little like it’s catch 22.

Is the UK economy okay hun?
In one word, no, in a few more words, also no. The International Monetary Funds latest health check of the global economy downgraded the UK economy projected growth rate by 0.4% down to 0.6%…placing us behind Russia whose sanction hit economy is predicted to grow.

The reasons the IMF have downgraded the UK forecast are all the usual things we’ve heard nothing else about for the last 18 months because they are now part and parcel of our economic landscape, the fluctuations in energy prices, rising interest rates, labour shortages and taxes.

The IMF concluded that the UK would likely be the slowest-growing economy next year amongst the highest developed nations in the world. Jeremy Hunt still believes the UK economy is on the up and that growth is still set to out pace Germany, Italy and France over “the longer term” and of all the people to trust with things they know nothing about the IMF does believe that the UK is now “on the right track” with the IMF chief economist Pierre-Olivier Gourinchas stating that the UK “certainly trying to carefully navigate these different challenges and we think that they are on the right track”.

FTX, the greatest work of fiction of our time?
The trial of Sam Bankman-Fried started in earnest last week, FTX was one of the biggest Crypto exchange platforms until it went bankrupt back in November 2022 with a considerable amount of customer funds missing. Bankman-Fried denies fraud and has pled not guilty to misuse of customer funds and money laundering while bankrupt.

The day the exchanged the collapsed approximately $470m in cryptocurrency magically went missing and in August after a significant time lying dormant the $20m of the stolen funds have laundered like you would regular cash. The mystery is how did the thieves gain access to the digital keys (yawn crypto) to raid the wallets?

This week giving evidence was ex Alameda CEO Caroline Ellison and she testified around the validity of the balance sheet (lowered the leverage and therefore the risk of borrowed funds) and she stated on the stand “I didn’t want to be dishonest but also didn’t want to tell the truth” creating SEVEN version of the balance sheet, which truly is being committed to accounting, one is bad enough.

But my favourite nugget this week was from Gary Wang, a former top exec and co-founder of FTX who admitted their backstop (insurance) fund was an entirely fictional number from a number generator, it took daily trading volumes and applied a random multiplier, divided it by a cool round billion and then added it to the number already listed on the site as a value of the backstop fund. You don’t need any specialist knowledge about anything to know that is quite bad and this is only week two. This is like accounting Christmas!

Corporate Math: A record fine for KPMG
While fines don’t really disincentivise the Big 4 accounting firms from bad practice this week saw KPMG receive an absolutely whopper of a fine, the largest on record of £21m over what have been described as “textbook” failings in its auditing of Carillion with an “unusually large number of breaches” of audit standards that were both “significant and serious”

Carillion, a significant government construction contractor, collapsed in 2018 off the back of three years where it “was not subject to rigorous, comprehensive, and reliable audits in the three years leading up to its demise”.

The fine was originally £30m but because KPMG co-operated significantly with the Financial Reporting Council over the 5 year investigation this was reduced. KPMG’s UK chief executive Jon Holt said the findings were “damning” and that he “simply cannot defend the work that we did on Carillion”. Both the partner and audit lead have been fined and banned from the profession.

I feel this is far from done even 5 years on, the Government are still looking to disqualify Carillion directors on top of the fines levied on them by the Financial Reporting Council.

Current watch: The TikTok Effect – I was not expecting to enjoy this documentary, but now I feel better that really I am just defenceless to the content graph algorithm, because yes I do want to see what I am actually are interested in. This documentary is about the amateur sleuths and the anti-social behaviour in northern Europe this summer just gone.

Hosted by Marianna Spring, the BBC’s disinformation correspondent, who also this summer found herself in hot water over some exaggeration on her CV, but this aside has done an amazing job building out this documentary, the TikTok users she found to interview and the conversations she has really bring this to life. I have to admit this is not my side of TikTok, still very much on the pets and cooking side of TikTok with the odd thirst trap in there for good measure.

Current read: Anatomy of a Breakthrough by Adam Alter – Want to optimise your life? This book is a pretty good place to start, it really does what it says on the tin, it breaks down the anatomy of a breakthrough. If you’re feeling stuck or even unsure if you really are stuck this book combines the latest research, anecdotes and lived experience to help you look at the factors that might be keeping you stuck and how to get moving again. It’s the stories that really bring this book to life from a real lived experience perspective that just make it helpful, genuinely helpful. Whether its career, life or passion this book offers insight into turning the blockers into breakthroughs, I even found myself thinking ‘if I just rephrase that differently the answer is really obvious’.

Most Impactful Listen: Good Bad Billionaire – Oprah Winfrey: Queen of All Media – This podcast is always so interesting, Simon Jack, BBC business editor and Zing Tsjeng journalist are just so good together The pair look at any number of the 2,668 worlds Billionaires, track how and why they made their money and then judge whether they are good, bad or just wealthy. Episodes drop weekly and so far they have all been really interesting, I’ve learnt a lot but this episode particularly stood out. How did Operah become the richest African American of the 20^th Century having started life as a poor young girl in a potato sack? Is she good, bad or just wealthy? It’s well worth a listen to find out.